State Street hints at custody acquisition

UK – State Street Corp. says it would not rule out a further global custody acquisition as the industry consolidates.

“We wouldn’t rule it out,” said senior vice president Jeff Conway, when asked if State Street is looking at further custody acquisitions.

Conway hinted that State Street might be interested in the custody business of a large American organisation where custody is a relatively small part. He said that the parents of some of its rivals have suffered poor earnings and loan-loss reserves.

Richard Hogsflesh, managing director of custody consultants R& M Consultants, said: “I can’t think of anybody that is up for grabs at the moment.” He said State Street might have enough on its plate with the Deutsche acquisition.

Conway made the remarks at a briefing for reporters in London today. State Street bought Deutsche Bank’s Global Securities Services arm for 1.5 billion dollars in November. State Street has previously said that the acquisition would lead to around 1,000 job cuts in the US, though Conway reiterated that no job cuts are expected in Europe. “We’re looking to grow jobs,” he said.

He said some of the “top players” in the industry are asking questions about whether they want to be in the industry.

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